Eloro Resources Ltd (2) Symbol§C : ELO Shares Issued 48,317,900 Close 2011-12-08 C$ 0.10 Recent Sedar Documents Eloro to issue 3.08 million units for KWG subsidiary
2011-12-12 17:11 ET - News Release
Mr. Thomas Larsen reports
ELORO RESOURCES ANNOUNCES EXECUTION OF DEFINITIVE PURCHASE AGREEMENT WITH KWG RESOURCES; ACQUISITION OF LOUVICOURT TOWNSHIP GOLD PROPERTY CLOSED IN ESCROW
Eloro Resources Ltd. will execute a binding share purchase agreement with KWG Resources Inc., whereby KWG has agreed to exchange all of the outstanding shares of its wholly owned subsidiary, 6949541 Canada Inc., for shares and warrants of Eloro. 6949541 holds 11 contiguous mineral claims in Louvicourt township, adjacent to Eloro's wholly owned Simkar gold property near Val d'Or, Que. Eloro's acquisition of all of the outstanding shares of 6949541 from KWG has closed in escrow, subject to the occurrence of certain conditions discussed herein.
The terms of the agreement, previously announced on Sept. 14, 2011, were amended such that 6949541's 3,080,581 million outstanding shares will be exchanged for 3,080,580 million Eloro units and 3,080,580 Eloro premium warrants.
Each Eloro unit will consist of one common share and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one Eloro common share at a price of 24 cents per share for a term of 18 months, provided that, if the average closing price for the common shares on the TSX Venture Exchange (or on any other stock exchange on which the common shares may be listed) is at least 36 cents per share for 20 consecutive trading days (following the expiry of the four-month hold period), the warrants will expire unless they are exercised within 10 business days (or such longer period of time as Eloro may provide) after Eloro provides notice to accelerate the expiry time.
Each premium warrant will entitle the holder to purchase one Eloro common share at a price of $1 per share for a term of five years, provided that, if the average closing price for the common shares on the TSX Venture Exchange (or on any other stock exchange on which the common shares may be listed) is at least $1.50 per share for 20 consecutive trading days (following the expiry of the four-month hold period), the premium warrants will expire unless they are exercised within 10 business days (or such longer period of time as Eloro may provide) after Eloro provides notice to accelerate the expiry time.
The Louvicourt property was previously explored by KWG for its gold potential, and KWG retains a net smelter returns royalty on gold production from the Louvicourt property that is 1 per cent of the net smelter royalty, plus an additional 1 per cent of the NSR exceeding $2,000 per troy ounce, plus an additional 1 per cent of the NSR exceeding $3,000 per troy ounce.
It is a condition of closing in favour of Eloro that 6949541 will have working capital of $200,000 or that an equivalent amount of funds will be paid to Eloro.
The transactions contemplated herein have closed in escrow subject to the occurrence of the following conditions: (i) receipt of the TSX-V's final acceptance of the transaction; (ii) registration of the transfer of the mineral claims comprising the Louvicourt property with the appropriate government offices in Quebec; and (iii) registration of a net smelter returns royalty agreement with the appropriate government offices in Quebec.
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